AU Small Finance Bank (AUBANK) Q1 24/25 earnings summary

Executive summary

• Board approved application to RBI for transition to a Universal Bank, forming a committee to oversee the process and marking a significant milestone.

• Q1 FY25 marked the first quarter post Fincare SFB merger, with seamless integration and no disruptions, resulting in increased paid-up share capital and operations.

• Focus remains on building a strong deposit franchise, optimizing cost of funds, and maintaining asset quality, with emphasis on high RoA asset disbursements.

• Delivered PAT of ₹50,257 lakh, up 30% YoY, with annualized RoA at 1.6%.

Financial highlights

• Deposits at ₹97,290 crore as of June 30, with CASA deposits at ₹32,034 crore, up 1.8% sequentially; gross advances at ₹99,792 crore, up 3.4% QoQ.

• Net Interest Income rose 54% YoY to ₹1,921 crore; total income for Q1 FY25 was ₹431,470 lakh, up from ₹277,346 lakh in Q1 FY24.

• Disbursement yield for the quarter at 15.8%, up 250 bps from the previous quarter.

• Cost of funds reduced to 7.03% quarter-over-quarter.

• Operating profit before provisions and contingencies was ₹98,813 lakh, up from ₹31,924 lakh in Q1 FY24.

Outlook and guidance

• Deposit growth target of 25% for FY25, with confidence in achieving INR 25,000 crore in new deposits over the next nine months.

• Margins expected to moderate but remain within guided range for FY25; full-year NIM guidance in the range of 5.5% to 6.0%.

• Credit cost for FY25 expected to stay within long-term guided range, with microfinance credit cost provisioned at 3%.

• Cost to income ratio expected to be around 59.9%-62% for the year.